Exhibit 99.3
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made and entered into on this 10th day of January, 2007, by and
between XXXXXX XXXX LIFE INSURANCE COMPANY ("Xxxxxx Xxxx"), a life insurance
company organized under the laws of the State of Illinois, XXXXXX XXXX LIFE
INSURANCE COMPANY QUALIFIED GROUP ANNUITY SEPARATE ACCOUNT("Separate Account"),
a separate account established by Xxxxxx Xxxx pursuant to the Illinois Insurance
Code, and XXXXXX XXXX INVESTORS, INC. ("Investors"), a corporation organized
under the laws of the State of Maryland.
WITNESSETH:
WHEREAS, Xxxxxx Xxxx proposes to issue to the public certain variable annuity
contracts and certificates thereunder ("Contracts"); and
WHEREAS, Xxxxxx Xxxx has, effective October 16, 2006, established the Separate
Account for the purpose of funding the Contracts, which Separate Account is
registered with the Securities and Exchange Commission ("Commission") as a unit
investment trust under the Investment Company Act of 1940; and
WHEREAS, the Contracts to be issued by Xxxxxx Xxxx are presently being
registered with the Commission for offer and sale to the public, and otherwise
are in compliance with all applicable laws; and
WHEREAS, Investors, a broker-dealer registered under the Securities Exchange Act
of 1934, proposes to act as the principal underwriter in the offering and sale
of said Contracts; and
WHEREAS, Xxxxxx Xxxx desires to obtain the services of Investors as the
principal underwriter of such Contracts issued by Xxxxxx Xxxx through the
Separate Account and registered with the Commission;
NOW THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions set forth herein, and for other good and valuable consideration,
Xxxxxx Xxxx, the Separate Account and Investors hereby agree as follows:
1. Investors will serve as the distributor and principal underwriter
("Distributor") for the Contracts that will be issued by Xxxxxx Xxxx
through the Separate Account and will be registered with the Commission
for offer and sale to the public.
2. Investors will use its best efforts to effect the offer and sale of
the Contracts to the public on a continuing basis. Investors shall be
responsible for compliance with the requirements of state broker-dealer
regulations and the Securities Exchange Act of 1934 as each applies to
Investors in connection with its duties as Distributor of said
Contracts.
3. Subject to the written approval of Xxxxxx Xxxx, Investors may
contract with other broker-dealers registered under the Securities
Exchange Act of 1934 and authorized by applicable law to sell the
Contracts. Any such contractual arrangement is expressly made subject
to this Agreement, and Investors will at
all times be responsible to Xxxxxx Xxxx for the distribution of all
Contracts.
4. Warranties
(a) Xxxxxx Xxxx represents and warrants to Investors that:
(i) A Registration Statement under the Securities Act of 1933, to be
used in conjunction with the offer and sale of the Contracts, and a
Registration Statement under the Investment Company Act of 1940 with
respect to the Separate Account, have been filed with the Commission
in the form previously delivered to Investors and that copies of any
and all amendments thereto will be forwarded to Investors at or
before the time that they are filed with the Commission;
(ii) The Registration Statements and any further amendments or
supplements thereto will, when they become effective conform in all
material respects to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder, and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to Xxxxxx Xxxx by Investors expressly for use therein;
(iii) Xxxxxx Xxxx is validly existing as a stock life insurance
company in good standing under the laws of the State of Illinois,
with power (corporate or other) to own its properties and conduct
its business as described in the Registration Statements, and has
been duly qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require
such qualification;
(iv) The Contracts to be issued through the Separate Account and
sold by Xxxxxx Xxxx through Investors hereunder have been duly and
validly authorized and, when issued and delivered against payment
therefor, will be duly and validly issued and will conform to the
description of such Contracts contained in the prospectus relating
thereto;
(v) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which Xxxxxx Xxxx
is a party or by which Xxxxxx Xxxx is bound, Xxxxxx Xxxx'x
Certificate of Incorporation or By-laws, or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over Xxxxxx Xxxx or any of its properties; and no
consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by
Xxxxxx Xxxx of the transactions contemplated by this Agreement,
except such as may be required under the Securities Exchange Act of
1934 or state insurance or securities laws in connection with the
purchase and distribution of the Contracts by Investors; and
(vi) There are no material legal or governmental proceedings pending
to which Xxxxxx Xxxx or the Separate Account is a party or of which
any property of Xxxxxx Xxxx or the Separate Account is the subject,
other than as set forth in the prospectus relating to the Contracts,
and other than litigation incident to the kind of business conducted
by Xxxxxx Xxxx which, if determined adversely to Xxxxxx Xxxx, would
not individually or in the aggregate have a material adverse effect
on the financial position, surplus or operations of Xxxxxx Xxxx.
(b) Investors represents and warrants to Xxxxxx Xxxx that:
(i) It is a broker-dealer duly registered with the Commission
pursuant to the Securities and Exchange Act of 1934;
(ii) It shall permit the offer and sale of Contracts only by and
through persons who are appropriately licensed under both the
securities laws and state insurance laws;
(iii) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of or constitute a
default under, any statute, any indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which Investors
is a party or by which Investors is bound, the Certificate of
Incorporation or By-laws of Investors, or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over Investors or its property;
(iv) No offering, sale or other disposition of any Contracts will be
made until Investors is notified by Xxxxxx Xxxx that the subject
Registration Statement has been declared effective and that the
Contracts have been released for sale by Xxxxxx Xxxx; and such
offering, sale or other disposition shall be limited to those
jurisdictions that have approved or otherwise permit the offer and
sale of the Contracts by Xxxxxx Xxxx.
(v) To the extent that any statements or omissions made in the
Registration Statements, or any amendment or supplement thereto are
made in reliance upon and in conformity with written information
furnished to Xxxxxx Xxxx by Investors expressly for use therein,
such Registration Statements and any amendments or supplements
thereto will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
5. Investors shall keep, in a manner and form prescribed or approved by
Xxxxxx Xxxx and in accordance with Rules 17a-3 and 17a-4 under the
Securities Exchange Act of 1934, correct records and books of account
(as required to be maintained by a registered broker-dealer acting as
principal underwriter) of all transactions entered into on behalf of
Xxxxxx Xxxx and with respect to the Contracts. Investors shall make
such records and books of account available for inspection by the
Commission and Xxxxxx Xxxx, and Xxxxxx Xxxx and the Commission shall
have the right to inspect, make copies of or take possession of such
records and books of account at any time on demand.
6. Subsequent to having been authorized to commence with the offering
contemplated herein, Investors will utilize the currently effective
prospectus relating to the subject Contracts in connection with its
selling efforts. As to the other types of sales material, Investors
agrees that it will use only sales materials as have been authorized
for use by Xxxxxx Xxxx and which conform to the requirements of federal
and state laws and regulations, and which have been filed where
necessary with the appropriate regulatory authorities.
7. Investors will not use any prospectus, sales literature, or any
other printed matter or material in the offer or sale of any Contract
if, to the knowledge of Investors, any of the foregoing misstates the
duties, obligations or liabilities of Xxxxxx Xxxx or Investors.
8. Investors, as Distributor, shall be entitled to such remuneration
for its services and for the services of its salaried employees and
such reimbursement for its charges and expenses as will be contained in
such Schedules of Remuneration as may be adopted from time to time.
Said Schedules of Remuneration may be amended from time to time with
the mutual consent of the undersigned parties.
9. If any purchase payment premiums shall be returned by Xxxxxx Xxxx or
should Xxxxxx Xxxx become liable for the return thereof for any cause
other than surrenders or withdrawals by Contract owners pursuant to the
terms of the Contracts, either before or after termination of this
Agreement, Investors agrees to pay Xxxxxx Xxxx the amount of
remuneration previously paid over to it by Xxxxxx Xxxx with respect to
such premiums.
10. Investors makes no representation or warranties regarding the
number of Contracts to be sold or the amount to be paid thereunder.
Investors does, however, represent that it will actively market such
Contracts on a continuous basis while there is an effective
registration thereof with the Commission.
11. Investors may render similar services or act as Distributor or
dealer for issuers other than the Separate Account or sponsors other
than Xxxxxx Xxxx in the offering of their securities.
12. The Contracts shall be offered for sale on the terms described in
the currently effective prospectus describing such Contracts.
13. Xxxxxx Xxxx will use its best efforts to register for sale, from
time to time as necessary, additional dollar amounts of the Contracts
under the Securities Act of 1933 and, should it ever be required, under
State Blue Sky Laws and to file for approval under state insurance laws
when necessary.
14. Xxxxxx Xxxx reserves the right at any time to suspend or limit the
public offering of the subject Contracts upon one day's written notice
to Investors.
15. Xxxxxx Xxxx agrees to advise Investors immediately:
(a) of any request by the Commission (i) for amendment of the
Securities Act Registration Statement relating to the Contracts or
(ii) for additional information;
(b) of the issuance by the Commission of any stop order suspending
the effectiveness of the Securities Act Registration Statement or
the initiation of any proceedings for that purpose; and
(c) of the happening of any material event, if known, which makes
untrue any statement made in the Securities Act Registration
Statement or which requires the making of a change therein in order
to make any statement made therein not misleading.
16. Xxxxxx Xxxx will furnish to Investors such information with respect to the
Separate Account and the Contracts in such form and signed by such of its
officers as Investors may reasonably request; and will warrant that the
statements therein contained when so signed will be true and correct.
17. Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.
18. Absent the prior written consent of Xxxxxx Xxxx, this Agreement will
terminate automatically upon its assignment.
19. This Agreement shall terminate, without the payment of any penalty by either
party:
(a) at the option of Xxxxxx Xxxx or of Investors upon thirty days' advance
written notice to the other; or
(b) at the option of Xxxxxx Xxxx upon institution of formal proceedings
against Investors by the Commission or any state regulatory body; or
(c) at the option of Xxxxxx Xxxx, if Investors or any representative
thereof at any time
(i) employs any device, scheme, or artifice to defraud; makes any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading; or engages in any act, practice, or course of
business which operates or would operate as a fraud or deceit upon any person;
(ii) fails promptly to account for and pay over to Xxxxxx Xxxx money
due it according to its records; or (iii) violates the conditions of this
Agreement.
20. Each notice required by this Agreement may be given by wire and confirmed in
writing.
21. Xxxxxx Xxxx agrees to indemnify Investors for any liability that Investors
may incur to a Contract owner or party-in-interest under a Contract (i) arising
out of any act or omission in the course of, or in connection with, rendering
services under this Agreement, or (ii) arising out of the purchase, retention or
surrender of a Contract; provided however that Xxxxxx Xxxx will not indemnify
Investors for any such liability that results from the willful misfeasance, bad
faith or gross negligence of Investors, or from the reckless disregard, by
Investors, of its duties and obligations arising under this Agreement.
22. This Agreement shall be subject to the laws of the State of Illinois and
construed so as to interpret the Contracts as insurance products within the
business operations of Xxxxxx Xxxx.
23. This Agreement incorporates all agreements, verbal and written, between
Investors and Xxxxxx Xxxx with regard to the offer and sale of the Contracts,
and supersedes and annuls any and all agreements between the parties with
regards to the distribution of the Contracts; except that this Agreement shall
not affect the operation of previous agreements entered into between Investors
and Xxxxxx Xxxx that do not bear upon the sale of the Contracts.
This Agreement, along with any Schedules of Remuneration attached hereto and
incorporated herein by reference, may be amended from time to time by the mutual
agreement and consent of the undersigned parties; provided that such amendment
shall not affect the rights of existing Contract owners, and that such amendment
be in writing and duly executed.
This Agreement shall become effective upon the effective date of the
Registration Statement filed under the Securities Act of 1933 with respect to
the Contracts.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
duly executed as of the date first stated above.
Xxxxxx Xxxx Life Insurance Company
/s/ Xxxxx X'Xxxxx
----------------------------
By: Xxxxx X'Xxxxx
Xxxxxx Xxxx Life Insurance Company Qualified Group Annuity Separate Account
/s/ Xxxxx X'Xxxxx
----------------------------
By: Xxxxx X'Xxxxx
Xxxxxx Xxxx Investors, Inc.
/s/ Xxxxx Xxxx
----------------------------
By: Xxxxx Xxxx
MEMORANDUM OF UNDERSTANDING
AMONG XXXXXX XXXX LIFE INSURANCE COMPANY,
XXXXXX XXXX LIFE INSURANCE COMPANY
QUALIFIED GROUP ANNUITY SEPARATE ACCOUNT
AND XXXXXX XXXX INVESTORS, INC.
DATED AS OF January 10, 2007
In accordance with a Distribution Agreement dated January 10, 2007 among Xxxxxx
Xxxx Investors, Inc. ("Investors"), Xxxxxx Xxxx Life Insurance Company
("HMLIC"), and Xxxxxx Xxxx Life Insurance Company Qualified Group Annuity
Separate Account ("Separate Account"), Investors is responsible for the
supervision and recordkeeping required with respect to sales of the Contracts.
The following outline, consistent with the responsibility of Investors,
clarifies the processing of certain premium and commission transactions related
to said sales and maintenance of books and records in accordance with Commission
Rules 17a-3 and 17a-4. Terms used and not defined herein will have the meaning
given to them in the Agreement.
1. The gross stipulated payments from Contract owners will be received by
HMLIC. Deductions, as detailed in the appropriate HMLIC prospectus will be taken
from the gross payments. The amount designated by the Contract owner to go to
the fixed account will then be deducted, and the remainder will be allocated to
the appropriate subaccount(s) of the Separate Account as designated by the
Contract owner. HMLIC will maintain records on behalf of HMII as to all premium
amounts allocated to the Separate Account.
2. HMLIC will pay commissions directly to Xxxxxx Xxxx Service Corporation
("HMSC"), which provides the sales personnel under the general supervision of
Investors for the marketing of variable annuity contracts. HMSC establishes and
maintains records on behalf of Investors relating to commission payments to
sales personnel. HMLIC establishes and maintains records relating to commission
payments to HMSC.
3. Commissions payable to HMSC are based upon the gross stipulated payments
received. Currently, fixed account and Separate Account amounts are subject to
the same commission structure. Future modification to the commission structure,
if any will modify this procedure accordingly.
/s/ Xxxxx Xxxx /s/ Xxxxx X'Xxxxx
------------------------------- -----------------------------------
Xxxxxx Xxxx Investors, Inc. Xxxxxx Xxxx Life Insurance Company
/s/ Xxxxx X'Xxxxx
-------------------------------
Xxxxxx Xxxx Service Corporation
Schedule of Remuneration
for Distribution Agreement dated
January 10, 2007
Xxxxxx Xxxx Life Insurance Company
Xxxxxx Xxxx Life Insurance Company Qualified Group Annuity Separate
Account
Xxxxxx Xxxx Investors, Inc.
Pursuant to paragraph 8 of the Distribution Agreement dated January 10, 2007, of
which this schedule is made a part, Xxxxxx Xxxx Investors, Inc. shall be
compensated at the annual rate of $25,000, payable in twelve (12) equal
installments by Xxxxxx Xxxx Life Insurance Company to Xxxxxx Xxxx Investors,
Inc. for services rendered with respect to sales of variable annuity contracts.
Xxxxxx Xxxx Life Insurance Company Xxxxxx Xxxx Investors, Inc.
/s/ Xxxxx X'Xxxxx /s/ Xxxxx Xxxx
---------------------------- ------------------------------
By: Xxxxx X'Xxxxx By: Xxxxx Xxxx
Xxxxxx Xxxx Life Insurance Company Qualified Group Annuity Separate Account
/s/ Xxxxx X'Xxxxx
----------------------------
By: Xxxxx X'Xxxxx
